Thirtieth Amendment of the Constitution (Treaty on Stability, Coordination and Governance in the Economic and Monetary Union) Bill 2012: Second Stage (Resumed)

Friday, 20 April 2012

Dáil Éireann Debate
Vol. 762 No. 2

Page of 10

Atairgeadh an cheist: “Go léifear an Bille an Dara hUair anois.”

Question again proposed: “That the Bill be now read a Second Time.”

Deputy Timmy Dooley:I welcome the opportunity to speak on this important Bill, which will play a crucial role in the future of the country. Since the EU leaders finalised the agreement of the fiscal compact in late January, Fianna Fáil has consistently argued that the people of Ireland should be consulted on the issue via a referendum. We will campaign in favour of the treaty on 31 May as a significant step in facing up to the fundamental challenges facing the eurozone. Yesterday I had the privilege of being appointed Fianna Fáil director of elections for the upcoming campaign and I look forward to a vigorous few weeks on the trail engaging with voters. However, this is only a step on the long road and other critical measures must be taken.

The role of the ECB should be fundamentally reformed and expanded, fiscal union must be established and pan-European banking regulations should be fully set out. The fundamental design flaws of the euro must be addressed in order to get Europe’s economy moving again. Public discourse on this treaty must be fully informed and the wider issues of what must be ultimately done to stave off the euro crisis and to place economic growth on a sustainable path should be kept at the forefront of public debate.

11 o’clock

Fianna Fáil has a long and proud history as a pro-European party. We take pride in having led Ireland into the European Economic Community, EEC, in 1973, and that historic moment broke the reliance of this country on the UK, marking a defining decision and our place in world history. The role of Europe in the economic and social advancement of this country has been richly beneficial for all sections of Irish life with the ongoing role of the EU in supporting the Northern Irish peace process and our agricultural industry, providing open markets for our exporters and infrastructural development, as well as facilitating ease of travel for citizens across the Continent and the free flow of capital. All these aspects of our involvement with the EU have shaped how we live across the island and the quality of life we enjoy, which would have been unimaginable in previous generations.

From the European Coal and Steel Community to the Treaty of Rome to the current fiscal compact treaty, the European project has transformed the Continent, a landscape which was devastated by war, populated by people ravaged by poverty and ruled by nations locked into continuous conflict. It has changed utterly to one of the most peaceful and prosperous corners of the world in human history. The acrimony of the feuding which bloodied the pages of [225]European history has been supplemented by an era of co-operation, economic growth and rising living standards. The European Union represents a project of transnational co-operation on a historically unprecedented scale. The Single European Act 1986 guaranteed freedom of capital movement, goods and services and altered national boundaries on a scale that no other inter-state organisation has attempted. The rich benefits of markets and borders open for business, study, holidays or living abroad can be taken for granted but other generations could only have imagined them.

The aspersions cast upon the EU as an elitist project ignores the major role it has played in advancing the cause of democracy across a Continent torn apart by fascism and communism. Membership of the EU has provided a strong incentive for the democratisation of and deepening respect for human rights among applicant states. The success of the EU played a major role in staving off the threat of communism and the advancement of the Soviet Union during the Cold War. It stands as a shining example to other tentative unions, such as the African Union and the Arab League, and their efforts to create mutually beneficial and peaceful links between precariously related states.

The euro crisis, unacceptably high unemployment levels, stagnant economic growth and the grave challenges for sovereign debt mark a serious challenge to the European project which has secured so much for this Continent. Fundamental design flaws in the euro from its origins in the post-Berlin Wall Maastricht treaty have returned to haunt the currency. The idea of a single currency was borne from a long-standing effort to combat the currency battles that scarred the EEC and the resulting price instability that undermined economic growth. Under a single currency, events like the “Battle of the Franc” in the early 1990s would become a relic. In the grave uncertainty and instability of the post-world war globe, with a reunited Germany at the centre of Europe, there were also clear political implications in utilising a single currency to bind the Continent closer.

From its inception there was a failure to appreciate fully the ties between monetary and fiscal union. The illusion of lowered sovereign debt among diverging states, the need for banking regulation because of free-flowing currency across member states and the deepening of economic links between participating countries has undermined the currency. Fiscal imbalance between states due to an inability to adjust currencies was initially obscured in the buoyant early years of the euro. However, the financial crisis that exploded from the sub-prime mortgages problem of 2007 has mercilessly exposed these flaws. Bond markets have reacted sharply against the failure to confront these problems. The previously converging bond yields on German sovereign debt and those of peripheral states, like Greece, were sharply torn asunder. Market confidence in the reliability of sovereign debt as an investment was firmly shook, with the repercussions felt across all countries when agency ratings such as the French AAA standard were downgraded and bond yields in Spain and Italy soared dangerously high.

The pressing demands of the crisis have abated somewhat as the deal on Greek debt with creditors ramped up long-term ECB financing of banks and escalated secondary market bond buying, assuaging immediate problems. The long-term challenges persist and it would be extremely naïve of any commentator to assume the current relative calm indicates the problems have passed. If action is not taken to tackle these problems, even greater challenges will emerge in future.

The capacity of member states to borrow is reliant on taking significant and meaningful measures to tackle these problems, and this treaty is a step towards addressing them. The future of the eurozone hinges on putting in place a renewed infrastructure to solve the problems that have beset the currency. Economic growth in the EU is also bound with the fate of the single currency, as the collapse of the euro is estimated to have the potential to inflict between [226]25% and 50% in loss to GDP, according to certain studies. The capacity to borrow at affordable rates is a crucial tool in the economic kit of states which must borrow to fund infrastructural developments and meet ongoing financial obligations.

In essence, this fiscal compact treaty is a beefed up version of the 1996 growth and stability pact, which laid out a framework for the budgetary discipline of member states. However, the Stability and Growth Pact lacked effective enforcement rules. It is well known that Germany and France were the first two countries to break the provisions of that pact, breaching the deficit rules for several consecutive years. However, this compact aims to enforce these rules by imposing stringent oversight and a clear active role for the European Court of Justice. The fiscal compact treaty attempts to reduce the chance for poorer fiscal policy in one country to affect another country through budgetary oversight and co-ordination, as well as multi-year budgeting. This aims to enshrine good fiscal policy by making imprudent fiscal policies harder to enact in member states. We will argue throughout the campaign that the treaty is not enough on its own to solve the eurozone crisis. It is, however, one critical part of the puzzle and a step towards a comprehensive set of policies and the overhaul of the eurozone design framework needed to address the fundamental problems the eurozone faces. The limited mandate of the European Central Bank is one such fundamental issue that needs to be addressed. The lack of uniform financial regulation, including a pan-European eurozone bank resolution regime, is also a fundamental requirement, one which will have to be addressed in addition to the provisions and measures set out in the fiscal compact. The lack of a more ambitious fiscal union, one which involves transfers between states, is a key issue which will have to be addressed as part of an overall resolution of the crisis that has engulfed the eurozone.

Dr. Alan Ahearne correctly describes the treaty as an indispensable bridge to the policies necessary to confront the crisis, which creates a framework to co-ordinate fiscal policy in countries sharing the euro currency and allows for macroeconomic policy efforts across the eurozone. The treaty is best viewed as an essential part of the foundations of a new fiscal and monetary structure for the eurozone. It can also be viewed as putting in place the fiscal constraints needed before financial transfers to countries with weaker economies can occur to compensate for the financial imbalances that result from monetary union. This combination of fiscal and monetary measures is required to tackle the crisis by addressing the basic design flaws of the euro.

Fiscal union is the only real solution to the crisis and the problem of generating the economic growth and job creation required to tackle the endemic unemployment and anaemic growth levels that have hit Ireland hard in recent years. Without an effective system of financial transfers such as pooled sovereign debt, the economic dominance of Germany and other northern European countries will be copper-fastened because countries with weaker economies are unable to devalue their currency to compete. Fiscal union with eurobonds that pool sovereign debt will strengthen all member states’ economic performance. The US Federal Reserve provides a model from which the European Central Bank can draw in expanding monetary policy to buy debt from member states. The current restrictive system under which it is empowered only to purchase debt from the secondary market limits the financial firepower available to the bank — sometimes referred to as the bazooka effect — in tackling financial events. The ramped up capacity to buy sovereign debt providing a backstop to national debt would act as a panacea to market doubts about the viability of sovereign debt in the euro area.

This expansion of the role of the European Central bank can only take place if national budgetary constraints are in place to avoid the significant threats of inflation and currency devaluation. Strong, unified financial regulation across the European Union reflecting the reality of international finance within the remit of the ECB will be vital in ensuring the banking [227]crisis we have endured is not repeated in the future. This is particularly salient in the case of Ireland which met the Stability and Growth Pact requirements with ease but laboured under the illusion created by a bank fuelled property bubble. Pan-European regulation would ensure the spectacle of German banks recklessly lending to Irish banks and fuelling a property bubble would be avoided in the future. We have seen the effect of global finance in the ghost estates that ring our towns and in homeowners struggling with negative equity. Let us ensure we learn lessons and, more importantly, apply them. We will make this argument on the campaign trail. While the treaty is a significant step in the right direction, a long journey lies ahead.

The Fianna Fáil Party has continuously taken the initiative and spearheaded European Union engagement. Continued engagement with our European partners hinges on the legitimacy that can only be bestowed by the popular decision of citizens. For this reason, my party has continuously called for a referendum to be held on the substantive issue of the treaty to secure democratic approval for what is a fundamental measure. The ongoing support of ordinary citizens for the European project is vital to its future and losing this connection would ultimately destroy the European Union. Governments should not fear putting critical decisions to the people. The Government tried desperately to avoid holding a referendum. For all its talk of rebuilding relations with our European partners, its eagerness to avoid a referendum immediately puts it on the back foot in the referendum campaign. We know a little about its reluctance in this regard because Germany’s Minister with responsibility for European affairs, Mr. Michael Link, stated the European Union negotiations sought to design the eurozone fiscal compact in such a way as to avoid a referendum in Ireland. According to him, the negotiators sought “to design everything that is on the table in a way which would be okay in the eyes of the Attorney General and the Irish Constitution so that no referendum is needed.” This was one of the worst decisions made by the Government in the entire process because it indicated that it was not prepared to engage in a transparent process. As a fundamentally important agreement, the Government should have engaged with the people on the treaty at a much earlier stage. Its strident attempts to avoid a referendum and statements by certain Cabinet Ministers that referendums were by their nature not especially democratic have had a corrosive impact on the democratic legitimacy of the treaty and our ongoing engagement with the European Union.

On a broader level, efforts must be made to address the democratic deficit that is steadily eroding the core of the European project. A full, open and honest debate on the future direction of the European Union should always be at the heart of major EU decisions. The referendum marks a crossroads for Ireland’s involvement with the Union. People will make a positive choice by voting in favour of the treaty and the step forward it represents for the country and, more importantly, the European project as a whole.

The rush to hold the referendum after the Attorney General’s legal advice was issued does not bode well for the campaign. I am also wary of the Government using the referendum to score cheap political points. I watched the Minister for Justice and Equality, Deputy Alan Shatter, in the House yesterday.

Deputy Jimmy Deenihan:The Deputy was doing well until five minutes ago. He was being positive but has now turned political.

Deputy Timmy Dooley:I will help the Minister by remaining positive, but I also want to address the partisan political speech made by the Minister for Justice and Equality yesterday. I will do so without seeking to counter the political points he made. For the next six weeks pro-European parties which believe it is important to ratify the treaty must desist from engaging in political sniping on this issue.

[228]Deputy Jimmy Deenihan:The Deputy started it. I was about to compliment him on his contribution until five minutes ago.

Deputy Timmy Dooley:If the Minister will allow me to conclude, I will explain my position. The Minister of State, Deputy Lucinda Creighton, started it yesterday with remarks she made on the “Morning Ireland” programme which were followed by the statement made by the Minister for Justice and Equality in the House. Such contributions infuriate Fianna Fáil Party members who are working to ensure we get our supporters out to vote in favour of the treaty. It would be helpful if those Ministers who tend to put their feet in their mouths when speaking on various issues were to say little about the treaty in the next six weeks. Blatantly placing the referendum in the fray of domestic politics by explicitly linking it with the Government’s economic recovery plans risks turning the debate into a partisan affair. I know the Minister will not engage negatively as he has a great track record of embracing and understanding Deputies on this side.

The Government’s claim at a launch yesterday that a website on the referendum was new when it had operated previously smacked of laziness. I only hope its information campaign marks a major leap forward from the debacles of the household charge and water metering and that lessons have been learned for the forthcoming referendum. The Government must run an earnest, energetic and positive campaign based on the merits of the treaty and the strength and role of the European Union. Citizens must be fully informed on the subject and the temptation to enter the mire of misinformation in which some opponents of the treaty have engaged must be avoided. The strengths of the Union speak for themselves and the crude propaganda that lowers the quality of the debate on this vital issue should not be indulged in by either side. In the past some of those on the “Yes” side showed a tendency to over-egg the benefits to the State of certain treaties. On this occasion, the text of the treaty is relatively straightforward and largely devoid of the type of Eurospeak with which we are familiar. We should argue our case based on the content of the treaty and its implications for the country, rather than engaging in the extraneous arguments that featured strongly in previous campaigns.

Current opinion polls which indicate that 30% of the electorate will vote in favour of the treaty as opposed to 23% who will vote against it should not lull those of us who argue in favour of it into a false sense of security. With 40% of voters undecided, the campaign remains wide open and shows clear potential for a swing to the “No” side. Reflecting on potential pitfalls in the campaign, I am reminded of some of the words spoken after a previous referendum:

We were left with the vacuum in which misinformation began to seep into people’s minds and negative attitudes about a range of issues emerged during the course of the campaign. Confusion about the treaty was a contributory factor. Complacency is always the other enemy, in that if people see all the political parties lined up in favour of a positive answer to referendum questions, some of them will inevitably conclude that the referendum will pass while forgetting that it cannot pass unless people vote for it.

These were the words of the Taoiseach, then Leader of the Opposition, to Dáil Éireann after the defeat of the first Lisbon treaty referendum. I trust that he will heed the concerns he expressed during that referendum campaign and have every faith that he will.

I look forward to performing my role as director of elections for Fianna Fáil. We intend to run a strong campaign, based on a positive message of engagement with the European Union. We will outline our vision for the steps needed to address the euro crisis. We welcome the treaty as the first significant move in the right direction. Our canvassers and leaflets will highlight the positive contribution the European Union has made to Irish life and the immense potential [229]that the future holds. We will not shy away from the scale of the current challenges the Union faces but will support the treaty as a positive first significant step. We will assiduously avoid running a negative campaign solely based on fear and crude misinformation, which was such a feature of previous campaigns. The citizens of Ireland deserve better than this. Therefore, I call on all parties to ensure we will have the quality of debate needed at such an important moment for the country.

Fianna Fáil, unashamedly, believes in the European project. Leading Ireland into the European Union and reaping the benefits of EU engagement are an enduring legacy that has transformed the country for the better. The treaty is another step in our relationship with the European Union from which the people have benefited so much in the past 30 years. The decision facing the people on 31 May is whether Ireland should stay at the heart of the European Union that has pressed forward fundamental social and economic advances on the island. Fianna Fáil will fight to secure that place and looks forward to bringing that case to citizens.

Minister for Arts, Heritage and the Gaeltacht (Deputy Jimmy Deenihan):I would like to share time with Deputies Heydon, Griffin, Conlan and Humphreys.

Ireland may be an island but our trade, currency, exports and workforce stretch far beyond our geographical boundaries. This is a small open economy. This is easily said, but to underline and understand this fact, we need to recognise that Ireland exports 80% of everything it produces. We also depend on the stability of the currency — the euro — which we share in a 17 country eurozone. However, our reputation as a trading and exporting country, as a business focused country and a good place in which to work and raise a family has been severely damaged in recent years. Today, we are dependent on international institutions to pay pensions and wages and to keep our hospitals, schools and other public services running. Ireland and the European Union need stability which is at the core of the new treaty which strengthens the rules that support the euro and introduces better national budget rules, with improvements in the way euro countries work together and support each other. This is vital for all of the European Union but especially for Ireland. A stable euro will build confidence, helping to recover and generate jobs.

The treaty gives Ireland an insurance policy, ensuring we will have access to money to fund public services and government spending, if we need it. The Government is determined to return to the financial markets next year to raise money on our own again, like we did before. We are on target to do this, but we must also recognise that we cannot control world events and the world economy. The markets need to know that there is a backup in the form of the European Stability Mechanism, which we can only access if we ratify the treaty on 31 May. There are major benefits for Ireland, but, of course, it is also in our interests that all European countries have access to the ESM, if they need it. and manage their budgets in a responsible way.

A supportive vote for the treaty on 31 May will not change Ireland overnight. It will not immediately eliminate the array of challenges the Government is working to resolve. However, support for the treaty will be an important part of the solution and a step forward for Ireland, the European Union and the eurozone.

I was in the United States and the United Kingdom in the past few months. I have also been in contact with people from all over the globe and the perception of Ireland is very positive. This is reflected in the amount of investment that has happened in recent weeks and the number of jobs created by foreign direct investment. The reason this is happening is confidence in the country is definitely improving among international investors, which is reflected in investment and the creation of jobs here. I am sure the people who will benefit from the 500 extra jobs in Apple are delighted this morning. This is not just a coincidence. Apple would not be [230]making such a big investment were it not for the fact that it has confidence in the economy and how the Government is handling it.

At one time we were the shining light of Europe; then we were among those who nearly dragged it down. Now we are doing the right things and if we approve the treaty, it will send a very important signal from Ireland and Europe. The eyes of the world will certainly be on us. The European Union will go on without us, but internationally many will be looking to see how we handle the treaty. For that reason, the referendum is so important. I hope reason will prevail and that the recent introduction by the Government of charges, property taxes and so on will not cloud the debate and that people will look at the treaty separately from local political issues and vote for their futures. For those who are in receipt of various benefits, they should vote to protect them. Without this mechanism available to us in the future, it could have serious implications for all those who depend on the taxpayer to provide them with job supports or welfare benefits.

Deputy Martin Heydon:The decision in the referendum on the European stability treaty is one of the most important the country will take in the coming years. We will decide if we want to remain at the heart of the eurozone or leave ourselves outside the new rules and regulations for eurozone countries. There will be no second chance for us to review the treaty decision. Once 12 of the 17 eurozone countries ratify the treaty, it will be passed and apply to these countries.

Our entire economic recovery and future sustainability are linked with the ongoing stability and strength of the European Union and the eurozone. We agreed to become a member of the common European currency in June 1992, following the signing of the Maastricht treaty. In taking that decision we signed up to a common set of principles that must apply to countries using the same currency. What we are seeing in the referendum is the transposition of these same rules into Irish law. That many of the rules on balanced budgets and deficits were not enshrined in legislation has brought us and the eurozone towards the frightening vista of the collapse of an economy and our currency. It is in our interests that other countries should also sign up to these rules and keep stricter controls, particularly when we see what has happened in countries such as Greece. We also need these controls for future Governments to ensure we keep a tighter rein on spending. The fiscal compact copperfastens many of the rules and regulations to which we have signed up as a member of the eurozone. These rules are required to ensure the public finances will never again be left in a state where we have to be bailed out by our European neighbours. The former Taoiseach, Mr. John Bruton, has stated there should be much tighter rules which would prevent the presentation of generous budgets in the run-up to elections. If we look back at the budgets in the lead-up to the 2002 and 2007 general elections, they had a lasting and damaging impact on the economy for short-term political gain. The rules mentioned will go some way towards preventing this.

It is also in our interests that the confidence that is beginning to show in the economy and has led to an increasing number of job announcements continues to grow. The many recent job announcements such as PayPal, Eli Lilly, Mylan yesterday and Apple today, while a result of our re-emerging stability, are also a factor of our eurozone membership. Would these jobs be coming here if, after the referendum, we were viewed as not being at the heart of Europe? We have a unique selling point as the only English speaking country in the eurozone, and at a time when we need all the advantages we can get, this is something we should be promoting and emphasising.

As a Deputy from a rural background and a farmer, I believe that the ratification of this treaty is vital to the continued strong performance of our agricultural sectors. This has already [231]been recognised by the main farming groups such as the IFA, ICMSA and Macra na Feirme, which have already announced their support for a “Yes” vote and the active campaigning of their substantial membership to vote “Yes”. That is a ringing endorsement of the treaty and we need to see the further activation of civic society on this. It is not only a case of politicians needing to sell this treaty, we also need everybody who has an interest in the future of this country to agree not only to vote “Yes” but to sell that message to their colleagues, friends and further afield.

Ratification of this treaty will allow successful sectors such as the agrifood sector in which there is production and exports to continue to grow and expand for the benefit of the entire Irish economy. At a time when Irish food is on the up, for any company that is exporting, our position in Europe and as a major trading bloc is crucial to that.

Agriculture is one of the few sectors in which there is a common policy, namely the Common Agricultural Policy or the CAP. This policy is currently being renegotiated and its results will be critical for the future of this sector. As the holder of the Presidency of the EU for the first six months of 2013, Ireland will have an influential role in finalising these discussions. We need to ensure we have the maximum goodwill and support of all our EU partners to ensure the best deal possible is struck for this country. A negative vote in the referendum would be very difficult. In any negotiation process, one is dealing with human beings and if their view of us is that we are anti-European, it will not help us when we sit at the table.

I look forward to the upcoming campaign. I want to go out and meet the people of Kildare and explain to them why I believe a “Yes” vote on 31 May is the only sure way to ensure Ireland continues on its path to recovery.

Deputy Brendan Griffin:I wish to share my time with Deputy Seán Conlan. I am grateful for the opportunity to speak on this matter. I will be supporting this treaty because I firmly believe it is the right thing for Ireland at the right time. I call on the people of the country, in particular the people of my constituency of Kerry South, to support it because it is the correct thing to do. I thank many of the people who have already come out publicly in support of this treaty, particularly some of the groups and organisations such as the IFA which have come out very strongly in favour of the treaty because they recognise its many positive attributes.

I firmly believe there is nothing to be afraid of in this treaty and that it will be a very positive step for the country. Ratifying it would provide access to the ESM which is very important for Ireland because it is not only a bailout option, it will also assist in terms of competition for when we return to the markets and it will help Ireland to secure better rates on the markets should we return to them.

As was mentioned by previous speakers, ratification of the treaty would send out a positive signal to existing and potential investors in Ireland. It is important that signal is sent out. It would also lead to a combined effort on the European stage to ensure huge national budget deficits are avoided in the future. That will happen for the countries that have ratified this treaty and it is important we are with them. It will not, however, prevent over-dependence on unsustainable revenue measures in the future. That is something about which we as a country need to be vigilant in the future. We need to ensure our income methods are kept sustainable and realistic unlike what happened in the previous decade.

I call for as much information as possible to be put into the public domain so that people can make an informed decision. I call for an objective debate on the issue and for the contributions from all parties to it to remain specifically on the issue and not to be diluted by side issues because that would be disingenuous and would not serve the country or its people. What the people deserve is a focus specifically on the treaty and on issues pertaining to it.

[232]In regard to the logistics of the referendum, I have believed for a long time that all polling days in Ireland should be on a Saturday to allow maximum participation in the democratic process. I call for future polling days to be held on a Saturday. It would give people an opportunity to get to the ballot box and to exercise their democratic right. Presiding officers, polling clerks and counting staff should come from the live register. It would mean a great deal to those people. At this time when so many people are struggling financially, it would be a fair measure to give those people an opportunity to earn some income.

Deputy Seán Conlan:I welcome the opportunity to speak in support of the stability treaty. I see the key function of the Government as restoring our economic independence and creating the correct conditions to get all Irish people back to work. Ten years of populist, incompetent Government have resulted in a diminution of Irish independence, mass unemployment, emigration and a public and private debt mountain which will cause hardship for this and the next generation.

I very much welcome the fact the people will have the opportunity to vote in the referendum on this treaty. A “Yes” vote will help to prevent a return to bad, populist governments which always take the easy options and to the flawed economic policies of Cabinets containing Bertie Ahern, Brian Cowen, Deputy Micheál Martin, and Deputy Éamon Ó Cuív which destroyed this country. How will we do this? By insisting that future governments both here and in the rest of the eurozone implement balanced budgets as a norm, limit budget deficits to 3% in economic downturns and bring down debt-GDP ratios to 60% over a 20 year period.

We are already doing much of what is contained in this treaty. Ireland has already committed to reducing our deficit and this treaty merely formalises this process. People who want to ensure future governments both here and in the rest of the eurozone have to adhere to sensible and responsible policies which minimise fluctuations in the economic cycle and prevent a return to the boom and bust policies of the past should vote “Yes” for this treaty.

I believe passing this treaty will enhance our recovery programme as it will give us access to the ESM, a rescue fund of which we can avail if necessary. It will enhance confidence within the business community that Ireland is a stable place in which to do business and invest.

We cannot be sure of all the benefits which will result from passing this treaty but we cannot afford as a nation to limit our recovery potential with the uncertainty about our place in Europe that a “No” vote would engender. Unlike previous referenda, Ireland does not have a veto on this treaty. It will come into force on 1 January next regardless of how we vote. Ireland is the only English speaking country in the eurozone. This gives us great advantages in attracting foreign direct investment. Recently we had the announcement of 1,000 new jobs in PayPal in Dundalk which will have very positive effects in my constituency and the whole of the north east. It is important a “Yes” vote is secured because it will provide confidence to multinationals that Ireland continues to be a safe and stable place in which to invest to gain access to EU and eurozone markets.

Deputy Kevin Humphreys:I welcome the opportunity to speak on this Bill. As I was preparing to speak, I saw young children on a school tour come into the Visitors Gallery. I believe Deputy Ann Phelan has a school tour in and the young children on it are listening closely to the debate. We all carry a heavy responsibility to ensure we make the right decisions and conduct this debate in a proper manner, keeping to the subject and importance of it. Most people in this House will not bear the consequences of the decision on it. It will be borne by the likes of the young children who are observing this debate this morning.

[233]I can well remember in the late 1990s when the Irish economy took off. Historic negotiations were taking place for the euro to come into place. The punt was replaced and many of the children in the Gallery would not even know what a punt was, but it was followed by reckless economic management. The euro has driven growth across the Continent making trade, investment, tourism and travel much easier. The European project has faced many challenges but the threat to the currency due to the huge debts run up by many countries threatens our small, open economy. When the euro was set up, the Stability and Growth Pact formed the rules that would govern member states taking part. Out of 27 states, 23 broke the original rules. Greece never once met the criteria, keeping annual borrowing above 3% of GDP and not reducing debt. In Ireland, we reduced debt but did so by running a credit-fuelled boom that we are all paying for now. A common currency needs common rules. The fact that no country took the previous rules seriously for the past 15 years leaves us in a position where we must stabilise the euro and bring certainty to the economy. The stability treaty will allow us through legislation to bring into force the rules we must follow.

By no means is this treaty the solution to all our problems but it is one of the many steps we must take. People opposing the treaty expect other European countries to lend us the money without any conditions, as if we have an automatic right to their taxpayers’ money, but if we need access to the ESM, and I sincerely hope we will not, Germany and others will have to fund that. All European countries have an interest in ensuring the rules work.

We are at the edge of Europe and investors can choose to invest in Germany or Ireland. That is why we need certainty to encourage foreign direct investment. The treaty is an important part of securing that confidence and rebuilding the trust in the Irish economy. My own constituency has benefited from foreign direct investment, with many tech companies locating in the so-called silicon dock, rejuvenating the inner city. Anyone taking a trip into the Ringsend-Pearse Street area will see strong financial growth. That is the answer to our debt problem, but without stability across the eurozone, it is more difficult in Ireland. Between 1991 and 2000, when there was real economic growth, sovereign debt went from 95% of GDP to 35% as a result of that growth. We must repeat that miracle but that can only happen with a stable euro.

When considering if we needed a referendum, one woman approached my wife and said we should have the referendum because she never wanted to see another generation saddled with debt, and that if we went through the pain, we would have to ensure the next lot could not sink us again. The referendum will help achieve that. We cannot gamble with the futures of the children watching today. I ask people to support the treaty.

Deputy Caoimhghín Ó Caoláin:On Easter Sunday the Taoiseach and other Cabinet Ministers, as well as Oireachtas Members, myself included, stood outside the GPO and listened to the words of the Proclamation. As I speak on the austerity treaty today, I wonder did the Cabinet Ministers hear the same words that I heard: “We declare the right of the people of Ireland to the ownership of Ireland, and to the unfettered control of Irish destinies, to be sovereign and indefeasible.” The Cabinet that stood to hear those words now asks us to put before the people for approval a treaty that flies in the face of the 1916 Proclamation. It is a treaty that seeks to negate the right of the Irish people to the ownership of Ireland. It is a treaty that would surrender control of Irish destinies and fetter this and future elected governments, tying them to the failed economics of austerity.

The people would have expected such a surrender from the last Government. It reeks of the dying days of the Fianna Fáil regime. This was the Government that collapsed the economy, built a pipeline to pour public money into the banking black hole and brought in the troika. All of these things were denounced in no uncertain terms by both Fine Gael and the Labour Party while in opposition.

[234]Now what do we find? Not only are the billions still being paid out to bank boldholders, not only is the troika diktat still firmly in place, but we now also have a treaty that seeks to tie this State to an austerity programme that will prolong the recession precipitated by Fianna Fáil. As we speak, people are still reeling from the prospect of the latest imposition of water taxes, with both a flat annual charge and a charge for use and the threat of cut-off if they do not pay. This has come hot on the heels of the debacle of the household charge. Cuts in pay, cuts in education, cuts in health, cuts in social protection, cuts in health care, privatisation of State assets — this is austerity in action. This is the direct result of the surrender to the troika and much, much more of this is what Fine Gael and the Labour Party want the people to vote “Yes” to on 31 May.

Without a blush the Tánaiste and his Labour Party colleagues have dumped their pre-election promises to the electorate. The red flag has been cast aside, despite the weekend’s annual conference, and the blueshirt hairshirt is now firmly in control. Where now is the Labour Party refrain, heard throughout the 29th and 30th Dáileanna that taxes should be based on ability to pay and that those who can pay more should pay more? Where now is the warning from the Labour Party of the stealth taxes and charges that would be imposed by Fine Gael? The Tánaiste and his colleagues made these points repeatedly in this House.

Speaking in the Seanad yesterday the Minister for Public Expenditure and Reform, Deputy Brendan Howlin, said it is time “to hang up ideology” for a short while. I was astonished Deputy Howlin would utter those words. He was defending the privatisation of State assets. There is certainly no doubt that the Labour Party has hung up its ideology and its policies, particularly given the Minister’s utterances and his actions and those of his colleagues in Government in the past 12 months.

What of Fine Gael? It received a very substantial mandate last year but on the basis that it promised change and a new direction. Far from setting a new direction, it has carried on with the legacy of Fianna Fáil. There is not a hair’s breadth difference between the two. To this they have added an air of arrogance and self-righteousness, as personified by the Minister for hardship himself, the Tánaiste’s Cabinet colleague, Deputy Phil Hogan, and by the backbench Fine Gael chorus of hecklers — none of whom is here now, thank God — who seem to have little else to contribute to this Dáil. Now these parties want the people to approve the austerity treaty to set in constitutional concrete the failed policy that has brought us mass unemployment and emigration, cuts to vital public services and stealth taxes that punish low and middle income earners.

Those who doubt what we say about this treaty need only heed the words of one of its chief authors, German Chancellor, Angela Merkel. She left no ambiguity about its huge implications when she said: “The debt brakes will be binding and valid forever. Never will you be able to change them through a parliamentary majority.” The long-term nature of the treaty was also highlighted by ICTU economist Paul Sweeney who has said, “This treaty will contribute . . . to making things worse because it is essentially a coup by the right wing economic conservatives to impose fiscal austerity on us forever.” Bernadette Ségol, General Secretary of the European Trade Union Confederation, has said:

It is intended only to reassure markets. This agreement offers no long-term prospects for restoring employment and sustainable growth. Its sole objective is to tighten fiscal discipline and to have such discipline written into national constitutions or legislation. Europe must not become synonymous with sanctions and rigid fiscal policies. It must be identified with prosperity and must offer prospects for the future.

[235]Perhaps the most clear sighted analysis so far has been provided by the economist Michael Taft in his presentation to the Oireachtas Joint Committee on European Affairs. He has pointed out that the Government estimates the structural deficit will be 3.7% in 2015 and that under the treaty it would have to reduce it to 0.5%. This could require fiscal adjustments of over €8 billion, a doubling of the austerity measures the Government has planned in the next three years. Many economists and responsible commentators point out that the treaty will depress growth in the eurozone, having a negative impact on foreign demand for Irish goods and services. Far from stabilising the eurozone, many economists believe it will destabilise it. As Michael Taft stated: “The fiscal treaty will perpetuate instability in the eurozone . . . depressing economic growth during a period of stagnation will undermine confidence in an economy’s ability to generate the future revenue needed to repay its debts.” If the treaty had been in force in past decades, the State would not have been able to build up its infrastructure, from the ESB to telecommunications to transport. The positive growth at the start of the Celtic tiger period might not have been possible but the bubble would have been permitted. To quote Michael Taft again: “During a period of productive economic growth, the treaty would have depressed growth and employment. However, this same treaty would have validated an economy which was over-heating on speculative growth.”

The treaty is a recipe for further recession. It is based on failed, right-wing economics that are condemning millions across Europe to misery. Once again the Government is trying to frighten the electorate by pretending that the State will receive no funds from the European Union and that it will be thrown out of the eurozone. That is patent nonsense. It is the politics of fear, nothing else. This is the time for real courage. The people will be acting in their own interests and those of their children — contrary to what was said by an earlier speaker — if they reject the treaty. They will be reclaiming ownership of Ireland for the people.

The elite in Brussels and Frankfurt will lament an Irish “No” vote — let them do so. However, millions of citizens across the European Union will thank us if we say “No” to austerity and “Yes” to an economy in Europe that serves people rather than bankers and speculators. As the first voice today outlining the argument in support of a “No” vote on 31 May, I call on people to use their vote wisely and in their and their children’s interests by delivering a resounding and overwhelming “No” vote to the austerity treaty.

Deputy Sandra McLellan:On 31 May the people will go to the polls in one of the most important referendums the State has held since its foundation. They deserve a frank and honest debate on this issue, as there is too much at stake. The campaign must focus on the facts rather than the fantasy.

I listened to the Tánaiste, Deputy Eamon Gilmore’s contribution on this issue on Wednesday. I will quote one part of his speech in which he outlined the reasons for voting “Yes”. He said:

I am voting “Yes” because I believe it helps us. My point today is that voting “No” genuinely will not help Ireland’s recovery, it will hinder it . . . If the stability treaty is about anything, it is about making sure grave mistakes are not made again. It is about getting a sustainable, fair and people focused economy here in Ireland and across Europe, where public money is available for public services and job incentives, not for paying down debt. In addition, as I have said on many occasions, it is about the euro in our pocket.

I disagree with the Tánaiste’s analysis for a number of reasons. Saying “No” to the treaty will not hinder Ireland, rather it will strengthen its position within the European Union. Saying “No” will mean Irish sovereignty over its fiscal responsibilities will not be further eroded. How can this be bad for the people? The Government is speaking out of both sides of its mouth on [236]this issue. One day it tells the people that it is working hard to regain our sovereignty as it is imperative that we regain control of our finances if we are ever to grow the economy and get back to a situation where we are not reliant on bailout funds. How can it claim this is its primary objective while proposing a treaty that does the opposite?

The Tánaiste has said the treaty is about getting to a position where public money will be used to fund public services and provide job creation incentives. The Government has not shown anything in the last 12 months to suggest it is working to achieve this. We have seen how it has been willingly handing over public money to private bondholders to the detriment of public services and job creation measures. It is clear from the recent deal on the promissory note that the Government is committed to doing this for many years to come.

The single statement on which I agree with the Tánaiste is that this is all about the euro in our pocket. Unfortunately for the people, if the treaty is passed, many of them will have far fewer euro in their pockets. Acceptance of the treaty will mean a further €5 billion to €6 billion worth of cuts and savings will have to be found after 2015.

The people have suffered enough. It is time for a change of direction to one which gives people some hope there will be an end to austerity. Voting for the treaty will do the opposite. It will enshrine austerity into law and extinguish any hope the State has of getting off its knees and standing tall again. Voting for the treaty will ultimately mean deeper cuts in health care, education and local communities. It will mean more unjust stealth taxes such as the household tax and water charges, which will do nothing but punish struggling families. The Oireachtas will be undermined in that even greater decision making powers in economic and fiscal policy matters will be handed over to unelected officials in the European Union. The treaty is about creating a one-size-fits-all fiscal approach. This is a flawed concept and while it might sound good in theory, the reality is very different. A one-size-fits-all approach, particularly one embedded in the concept of austerity, would be a major mistake for the State and the European Union.

12 o’clock

Recent statements by various Ministers have given us an insight into the rhetoric they will use during the campaign. We are told that the treaty is about Ireland being at the heart of the European Union, as if to suggest rejecting it will leave us isolated. We are told the treaty is about job creation and putting in place the mechanisms required for the economy to recover. Nothing could be further from the truth. Rejection of the treaty will not result in Ireland being thrown out of the European Union or the eurozone. The treaty is not about job creation. Its supporters tell us that we must live within our means and that it will help Ireland to achieve this. I agree that Ireland must live within its means, but the main reason we are unable to do so is the unsustainable debt lumbered on the shoulders of the people as a result of bailing out bondholders and speculators.

Another myth being peddled concerns the notion that Sinn Féin is anti-European Union. This is not true. Sinn Féin believes partnership within the European Union should be based on independent sovereign states working for their mutual benefit. Our relationship with the Union should be engaged, confident, proactive and critical, where necessary.

I wish to address a point the Government repeats daily, that rejection of the treaty will deny Ireland access to funds if we require them in the future beyond the current bailout programme. To suggest that if we reject the austerity treaty, we will be denied European Stability Mechanism funding is simply not true. The blackmail clause, as it is known, is an empty threat. It has little, if any, legal force and conflicts with the primary mandate of the ESM to safeguard the stability of the eurozone as a whole, as written into the EU treaties. Let us be clear also [237]that this is not the only source of emergency funding available to member states that find themselves frozen out of the sovereign markets.

As the ESM has not yet been ratified by the State, the Government continues to have a veto over it. If it wanted, it could seek the removal of this blackmail clause. Unfortunately, however, Ministers know that without it the prospect of winning the referendum on the austerity treaty is greatly lessened.

In our Private Members’ motion last month Sinn Féin called on the Government to delay ratification of the ESM until after the austerity treaty referendum because it would allow a free and fair debate on the merits of the treaty, free from bullying or blackmail. The Government has since taken the first step in the right direction by delaying ratification of the ESM until after the austerity treaty referendum. I welcome this move. The Government now needs to remove this threat to the people and make it clear that if they reject the treaty, Ireland will go to the European Council and secure the removal of the blackmail clause, using the veto, if required.

Ireland is in the driving seat as the only country which is holding a referendum on the treaty. There is great support behind us from hard-pressed citizens in other European states who will not have the opportunity to have a say on the treaty. Everyone is looking to see what we do on it. I urge the people to vote “No”, not just for the sake of Ireland but for the sake of the European Union.

Deputy Pat Breen:I welcome the opportunity to contribute to this debate. Referendum day, 31 May, will be an important and defining day for the country, our future relationship with the European Union and the future of the euro. In the past 12 months the Government has worked hard to repair our international credibility and has succeeded. There is renewed optimism about Ireland and international investor confidence is starting to return. The number of foreign direct investment projects was up 20% last year; job announcements such as those made by PayPal, Mylan and Apple are testament to the increased confidence in Ireland and the prospects for future projects coming here are positive. If the economy continues to stabilise, we must work with our EU partners to put in place the mechanisms needed to ensure economic stability throughout the eurozone.

We are an island nation on the edge of Europe and must learn from the lessons of the past and the events of recent years. We cannot stick our heads in the sand, as some opposition Deputies would like us to do, and ignore the influence of international factors, including international market sentiment, on our economic stability.

Opponents of the treaty claim it will not fix the eurozone crisis or the economy. I take issue with these misinformed comments. The treaty is an essential element of the road map out of the crisis. It is an important part of the package needed to stabilise economic conditions in Europe because it provides assurances that the problems that emerged in Greece cannot be repeated.

When the people go to the polls on 31 May, I ask them to reflect on the role of the incompetence shown. Light touch regulation and the lack of corporate enforcement brought the country to its knees. I am conscious of the difficulties many ordinary people have to endure because of the sins of the past. However, the treaty presents an opportunity for the people to draw a line under the events of the past by putting in place the structures and procedures required to prevent Irish Governments from engaging in reckless economic mismanagement.

The treaty also presents the people with an opportunity to vote confidence in the euro. A strong eurozone will raise all boats and is pivotal to Ireland’s economic recovery. Our exports are the real success story of the economy. Last year they grew by 4.1%.

[238]I look forward to engaging with my constituents during the course of the campaign. I will be urging the people of County Clare to put on the green jersey on 31 May and ensure a “Yes” vote to ensure Ireland’s continued recovery.

Deputy Paul J. Connaughton:I thank the Chair for giving me the opportunity to speak in this important debate which will continue for the next six weeks.

A “Yes” vote in next month’s EU fiscal treaty referendum will be a vital step in turning around the economic fortunes of the country. However, the treaty may be ten or 12 years too late. If the rules it will introduce had been in place at the time, we might not have the economic problems we face. However, we are where we are.

The treaty is vital for the future of the youth of the country because it is necessary to restore economic confidence and ensure Ireland’s future place at the heart of the European Union. It is also crucial for all businesses where goods and services are traded internationally, particularly the agrifood industry, in respect of which rising export levels have provided a welcome good news story in recent months. The extent to which business leaders recognise the vital role a “Yes” vote to the treaty can play is evidenced by the fact that Chambers Ireland has stated it is vital in restoring confidence in Ireland and will support employment, as well as guaranteeing future access to the ESM, a crucial consideration in these times of international economic volatility.

The timing of the referendum could not be more crucial for Irish agriculture. Talks on the Common Agricultural Policy are taking place and due to conclude in the next 12 months. It is crucial that Ireland be seen to be at the heart of the European Union during this process. Irish negotiators have long held a significant position at these negotiations, working for the betterment of farmers such as those in the west, and their position will only be strengthened by the people demonstrating a commitment to working towards a stronger future within the European Union. The fiscal compact treaty is about getting the European Union back on track. It is particularly important for Irish agriculture that Ireland be part of a strong trading bloc and a common currency.

The treaty is a small step in getting the European Union back on the right road and the European economy back on track. The best interests of the people will be served by a “Yes” vote. Our debate on such an important issue must not be sidetracked. The debate must focus solely on the fiscal compact treaty and what it means for Ireland. The treaty, unlike previous treaties, is relatively compact and a reiteration of our signing up to necessary economic safeguards.

We should not lose sight of the importance to Ireland of the European Stability Mechanism which has proved crucial in allowing Ireland to access funds to meet day-to-day spending, public service salaries, pensions and social welfare payments for the 436,000 people currently seeking work. Turning our backs on this fund at a time of unprecedented volatility in world and particularly European markets would be economic folly on an unprecedented scale.

I strongly advocate a “Yes” vote on 31 May and urge everyone, on all sides of the House, who wants to see Ireland at the centre of a strong common currency area and a solid trading bloc to support the treaty in the referendum.

Deputy Regina Doherty:The economic and financial crisis that began in 2008 has, undoubtedly, resulted in one of the most pronounced recessions in the world economy since the 1930s. The new stability treaty constitutes a solid fiscal framework that would effectively discourage fiscal deviations and, eventually, lead to sound public finances. The treaty sets in stone a reinforced surveillance mechanism and makes provision for the co-ordination of economic poli[239]cies. It will further strengthen fiscal discipline in the euro area. Commonly agreed fiscal rules will be inscribed in international legislation which, in turn, should help the eurozone to regain trust and credibility. These are the values that are fundamental in overcoming the economic crisis.

To a large extent, there is also a crisis of confidence. Consumers, businesses and markets are uncertain what the future will bring. This has serious consequences for growth prospects owing to its effects on both investments and consumption. Bringing public deficit and debt ratios back to a sound and sustainable path through credible fiscal strategies is a precondition for restoring confidence and, thereby, stimulating growth. Crucially, a “Yes” vote will mean Ireland will be able to gain access to the permanent bailout fund, the European Stability Mechanism.

This week the Taoiseach said the advantage of ratifying the treaty with a strong “Yes” vote was a continued insurance policy for Ireland. A “Yes” vote will also provide a guarantee that no Government will ever run riot with either the people’s fortunes or money. Instability and uncertainty have affected every citizen and the treaty gives us the opportunity to put in place new limits on public debt and budget deficits, providing stability for Ireland’s domestic finances and across the eurozone.

This week the American Chamber of Commerce Ireland stated the perspective of US multinational investors in Ireland was that a “Yes” vote would promote stability, investment and growth in the economy. By voting “Yes” we will maintain our position as an attractive location for investment, continue to put in place the necessary economic and budgetary reforms and preserve our strategically important place in the European Union. A “Yes” vote will reassure international investors that Ireland is dealing with its fiscal problems and stabilising its economy and help to protect the country as a location for foreign investment. Under the Government, the country has a plan for recovery. The stability treaty is a further step in the right direction, generating momentum in the economy to drive growth. The country must restore its confidence; it needs the treaty. Therefore, it must vote “Yes”.

Deputy Andrew Doyle:I welcome the opportunity to speak in the debate on the treaty which has been called many things from an “austerity treaty” to a “fiscal compact” to a “stability treaty”. What one calls it depends on the way one wants to look at it, which will decide the approach one takes.

The euro currency covers 17 countries. When this country decided that it should join the Economic and Monetary Union, it did so because it was in our best interests to do so. An overwhelming majority of the people decided that it was in our best interests to be part of the euro currency. We joined the full union on 1 January 2002 and have been part of it since. That is still the message from those who need a stable and strong currency. Those who have doubts about the treaty should listen to people outside the Chamber or the political sphere, those who deal in international trade. They are the ones who understand the importance of having access to a market, in a simple and straightforward way, by virtue of being part of a single, strong currency and remaining at the heart of it.

We must bear in mind that the euro is only ten years old. It is in its infancy in terms of the lifespan of a currencyand we did not get everything right at the start. One of the things we did not get right was taking prudent, preventive measures to stop the debt burden problem arising. We are dealing with the legacy of this now. It amuses me to hear those who refer to the treaty as an “austerity treaty” and say it will hamstring us for the rest of our days. They are the same people who said reckless lending, borrowing and a lack of prudence led us into the current mess. We must remember that if and when the treaty is ratified, it will not apply to this country until after 2015, when we are out of recovery mode. The treaty is about the introduction of preventive measures to stop the same pattern recurring. If I run a business or [240]a household budget for a family, when I have a surplus, I save it and when I have a deficit, I either use my savings or seek a facility to borrow. That is what we are talking about — keeping our finances within wise and prudent parameters in order that we can never again overstretch an economy and put such a burden on the public and future generations. That is what the treaty is about.

I return to those outside the political sphere calling for a “Yes” vote. They are the people who understand how important it is that we have a currency that is at the core of the European economy. As the single, biggest exporting country within the eurozone and the European Union, it is daft to think we could consider putting ourselves outside it.

Reference has been made to using our power of veto over the European Stability Mechanism, ESM, treaty. That is not the language we should use when for the past three or four years we have been and are trying to work with others to cut us a better deal. The same people now say we should veto proceedings if we do not like what has been put in front of us. The notion that by saying “No” this time we will strengthen our hand, if and when there is another treaty, is nonsense. Whatever about the validity of the argument made in the context of the Lisbon treaty, that does not hold true in this case because as soon as 1 January 2013 arrives and 12 countries have ratified the treaty, one is either with them or one is not. It will be too late to join after that. We would be outside the door knocking on it and asking to come in. Introducing a veto would weaken our hand rather than strengthen it. I, therefore, urge people to judge the treaty on its merits and not to introduce other grievances. I urge them to listen to what is being said about the treaty and its merits.

Tánaiste and Minister for Foreign Affairs and Trade (Deputy Eamon Gilmore):I express my thanks and appreciation to the Members who have contributed to this important debate. This is extremely important legislation which will facilitate the holding of a referendum on the stability treaty on Thursday, 31 May. I have already said to the House that the treaty is critical to the future of the country. If it is about anything, it is about making sure the costly mistakes of the past are not repeated. It is about having a sustainable, fair and people-focused economy in this country and across Europe. We want to have public money, the euro, available for public services and job incentives, not for paying down debt. As I have said on many occasions, this is about the euro in our pocket. This is a matter of vital interest for every man, woman and child in the country.

I heard Deputy Sandra McLellan and other speakers take issue with this position in the course of the debate. They also took issue with the assertion I made that a “Yes” vote in ratification of the treaty was important for the country, would be good for its people and that a “No” vote would be damaging. Let me be clear: if we reject the treaty, there will be consequences. At a minimum, we would contribute to continuing uncertainty and instability about the euro. I would like to hear someone explain to me how it is in the interests of any worker in this country that there be doubt about the value of the euro, the currency in which they are paid. I would also like an explanation of how it is in the interests of those on pensions or coming close to pension age that there be doubt about the value of the currency in which their pensions are paid. I would like to hear how it is in the interests of anyone with small savings that the value of these savings be in doubt. At a minimum, it would send a message about our relationship with the euro to the very people we want to invest in this country to create jobs. One of the things I know from the work I do as Minister for Foreign Affairs and Trade is that one of the first questions asked by investors, including potential investors, these days is not about the state of the economy but about the state of the European economy and the stability of the euro.

[241]We have been doing very well. Happily, today we hear another major announcement of a significant number of jobs being created in Cork. It comes on the back of several other announcements in recent weeks, all of which are the result of the work we have been doing in building and rebuilding this country’s reputation and assuring investors that this is a good place in which to invest. We do not want to put this at risk by sending a message that the country is somehow ambiguous about the euro and its future. In addition, a “No” vote would pull away the safety net of the European Stability Mechanism, to which I hope as a country we will never need to have recourse, but if we did need, it is highly unwise of anyone to argue that it should be pulled away.

The argument seems to be made from the benches opposite, by those who are arguing against the treaty, that somehow if it is rejected, phoenix-like, a new European economy will emerge and all of our financial difficulties will simply be wiped away. That is not the case. If the treaty is rejected, on the following day we will still have a deficit that must be dealt with. As I said at the Oireachtas committee, there is a deficit of €13.7 billion to bridge.

It is interesting that the very people who are arguing against this treaty are also those who are saying we should default, in which case we would not have access to private funding. They are the people who have been saying that the troika and its money should be sent away from the country so that we do not have access to the emergency funding that we now have under the programme. Third, they are saying that we should not have the European Stability Mechanism either, and some have gone so far, I understand, as to suggest that the establishment of the European Stability Mechanism should be vetoed or blocked. How on earth would we bridge the €13.7 billion? The Government has a plan for the bridging of that deficit. It is a plan which involves a graduated reduction of our deficit over a number of years coupled with a strategy which we have set out, both for this country and for Europe, for the creation of jobs and economic growth that will bring about the lift that we need to get out of our economic difficulties.

The opponents of this treaty are going around arguing that the passing of this treaty will result in prolonged austerity in this country. The reverse is the case. The rejection of this treaty is what will result in prolonged austerity for this country. The opponents of this treaty have to date not put forward a single credible idea as to how the deficit for this country can be reduced. Where will Deputy Ó Caoláin get the €13.7 billion to bridge the gap? If one pulls away the emergency funding, if one pulls away the programme we already have, if one rejects the idea of borrowing money on the private markets or having access to it, how will one bridge the funding? Where will one have the money to pay nurses, teachers and gardaí, to pay social welfare payments, to keep schools and hospitals running? It is time to lift the head out of the abracadabra type of economics that has been promoted by some of those arguing against this treaty.

The decision that we collectively, as the Irish people, will take at the end of May will have real consequences for the future of this country. The Government believes it will say a great deal about where we stand, about our aspirations for the future, about who we are and where we are going.

We have a burden of responsibility to ensure we fully equip the Irish people with all the information and understanding they need to make an informed choice on 31 May. That is why we have launched the most comprehensive Government information campaign ever held for a European referendum. Yesterday, we launched a dedicated website —stabilitytreaty.ie— so everyone can read the treaty and have it explained to them, article by article. The website is available also in mobile format and has links to both Facebook and Twitter.

[242]In early May, every home in the land will receive a copy of the treaty, with explanatory material printed in both Irish and English. Closer to polling day, every home will get another information note to help voters make their final decision as well-informed as possible. We will spare no effort to inform the Irish people. The debate under way in this House is a vital part of these efforts. I again compliment the sub-committee of the Oireachtas Joint Committee on European Union Affairs, and its Chairman, Deputy Hannigan, for the work it has been doing.

I have carefully followed the debate here and am struck by the need to address a few key issues which I believe have not yet been genuinely and honestly treated by all participating in this debate.

My firm view, as I stated, is that voting “No” will not help Ireland’s recovery; it will hinder it. Those who claim that this treaty is about austerity are plain wrong. Let us be clear about one matter. The treaty is about managing our debt in such a way that, over time, taxpayers’ money goes, not into servicing debts but increasingly into public services and targeted growth initiatives to create jobs.

As a small open economy, we have seen in dramatic fashion how quickly our public finances can become unstable in the face of global economic turbulence. We cannot allow that to happen again. Even if we were not party to the treaty, as a matter of proper economic management, we would have to reduce our indebtedness over time. Those who make claims about the treaty imposing austerity seem to believe that one can run a deficit forever, or accumulate debt without limit; one cannot. As I said earlier this week, that is not a matter of ideology; it is a matter of mathematics.

We also have heard much in this debate about the value of access to the European Stability Mechanism, the ESM. Some opponents of this treaty try to argue that linking the ESM to this treaty is some form of blackmail. This is fundamentally disingenuous.

There also has been the argument that we can veto the ESM, and I want to clear that up as well. First, as I emphasised already, the suggestions that we should seek to veto our insurance policy does not make practical sense. From the strictly legal perspective, we do not have a veto. The ESM treaty does not require unanimity to enter into force. It simply requires ratification by the states whose collective contribution to the funds in the ESM amounts to 90%. It is true that the amendment to Article 136 of the treaty on the functioning of the EU requires unanimity but as this amendment is purely for the purpose of clarifying that the member states may establish the ESM, it is not necessary for it to enter into force before the ESM is established.

As I see it, the link in this treaty to the ESM is essentially about having an insurance policy, ensure we have access, if needed, to the funding that allows us to fund public services and all Government spending. We are determined to return to the financial markets next year, to stand on our own two feet again. We are on target with our programme, and sentiment towards Ireland is positive, and yet we cannot control world events and the world economy. Markets need to know there is a backup in the form of the European Stability Mechanism and we can only access that if we ratify this treaty on 31 May. Who would argue that it is in Ireland’s interests that we be excluded from the ESM? Who could advocate that we invite all the uncertainty that would bring and most of all, where are the other sources of funding that opponents claim to be an alternative?

Finally, this treaty is fundamentally about efforts that we are making to restore confidence in us as a country in which to invest and to do business. Personally, I have been impressed in my contacts with investors and employers about the high premium they put on Ireland being part of a stable eurozone. These are the people who are creating jobs in this country and their confidence in us matters. They want to do business in Europe and they are convinced by what [243]Ireland has to offer as a European base, but they need reassurance that the euro currency is stable and that Ireland’s is a stable and well managed economy at the heart of the eurozone. A vote in favour of this treaty will bolster this confidence as a place in which to invest and create jobs.

The Government will not shy away from playing its full part in informing the Irish people in honest terms about what is at stake in this important vote. This is not a time for the registering of protests or to use the vote on this treaty for unassociated issues. Many of the difficult decisions the Government must make on a daily basis to help get this economy back on a stable footing require hardship and sacrifice and I very much regret that we find ourselves in that position as a country, but we will continue to work, night and day, to fix this. I am convinced that a “Yes” vote in this referendum is an essential contribution to that effort.

I have never claimed that the stability treaty, on its own, is the solution to all of our problems, but it is an important part of the solution to them. In addition to this stability treaty, as the Taoiseach stated at the European Council meeting in January, we also need a jobs and growth strategy in Europe in order for Europe to get out of its economic difficulties, but it is manifestly clear that we also must ensure that the euro — the currency in which we are paid, which we spend when we have it and which we save whenever we can — is secure and that the insecurity around it that we saw last year, which had such a potentially damaging effect on investment in Europe, and particularly here in Ireland, is settled. That is, essentially, what this treaty is about — putting into treaty form the rules governing the shared and common currency. It is in all our interests that there is stability in the eurozone. It is in our interests because that stability will inspire confidence in those who invest in this country, and also encourage domestic confidence which, of course, we need to see increase in order for economic recovery to come about.

The “Yes” vote in this referendum is an important decision that every individual must make in the privacy of the ballot booth reflecting on the implications of that decision for the euro in his or her pocket, for his or her own future in terms of job opportunities and, in particular, for the future of his or her children. It is not a panacea, but it is an important part of the recovery package that the country needs and we should not put it at risk.